Australian Stock Market Report – Midday July 18, 2014

The site of a Malaysia Airlines Boeing 777 plane crash is seen at the settlement of Grabovo in the Donetsk region, July 17, 2014. The Malaysian airliner was shot down over eastern Ukraine by pro-Russian militants on Thursday, killing all 295 people aboard, a Ukrainian interior ministry official said.
REUTERS

MID-SESSION REPORT (12.30pm AEST)

Despite being sold off this morning for the first time since Wednesday last week, local shares have crept into positive territory. The crash of yet another Malaysian passenger plane has kept global markets on edge, pushing the price of gold and oil higher, while the All Ordinaries Index (XAO) is up by 0.1 per cent.

Weakness from the miners is holding the market back most, with BHP Billiton (BHP) and Rio Tinto (RIO) falling by around 0.5 per cent. The price of gold surged by close to 1.5 per cent overnight with the safe haven asset becoming more attractive due to geopolitical concerns in the Middle East and Eastern Europe. Australia's largest gold stock Newcrest Mining (NCM) is up 2.9 per cent while the smaller Northern Star (NST) is up 3.6 per cent.

Unrest has also pushed the price of oil higher overnight to US$103.2 per barrel. Russia is one of the world's biggest oil and gas producers and supplies much of Europe with its energy needs. Oil and gas producer Woodside Petroleum (WPL) is up 0.6 per cent, adding to yesterday's gains following a solid quarterly production report. The smaller Santos (STO) is down 0.1 per cent despite delivering a 5 per cent rise in production and a 7 per cent jump in revenue. It has made no significant changes to its guidance.

Despite a softer start, three of the four major banks are now higher, with Westpac (WBC) improving by 0.5 per cent.

The industrials are one of the better performing sectors. Qantas (QAN) and Virgin Australia (VAH) are both rising despite the plane crash tragedy over Ukraine. QAN shares have jumped by 14 per cent this calendar year.

Australia's biggest telecommunications firm Telstra (TLS) is up 0.1 per cent and is trading at a nine-year high.

The Australian dollar buys US93.5 cents and has fallen with the market following the Malaysia Airlines crash.

At lunch, 1.05 billion shares have changed hands worth $2.17 billion. 396 stocks are up, 416 are in the red and 329 are unchanged.

Looking ahead, General Electric will be posting profit results tonight, a report on consumer confidence will also attract some attention in the U.S.